A number of financial advisers are reconsidering their platform relationships after some platforms directly contacted clients, without the advisers’ knowledge, regarding the legislative changes around the annual adviser fee, according to WealthO2.
The legislation, the Financial Sector Reform (Hayne Royal 4 Commission Response) Bill was passed last week which would require superannuation fund members to consent annually to trustees to deduct ongoing adviser fees from 1 July, 2021.
The firm’s managing director, Shannon Bernasconi, said advisers were unhappy to discover their platform provider had been contacting their clients about potential changes to their fees without notifying them.
“This isn’t the first time that some platforms have contacted clients of advisers – we saw similar instances when fees and commissions were turned off by some platforms well in advance of legislation,” she said.
“No doubt the platforms believe they have good reasons for taking this step, and circumventing the adviser’s relationship with their clients. They may claim that it is a regulatory requirement, or perhaps an action to reduce liability. Another reason may be that they lack the technological ability to obtain consent in a more adviser led or digital way.”
Bernasconi noted the banks’ exit from wealth management and advisers moving away from aligned distribution had changed the way adviser groups selected and used platform providers.
“We find it surprising that some platforms have chosen taken a very blinkered approach with advisers, which doesn’t take into account the annual review process where the client is consenting to fees already,” she said.
“Many platforms also don’t have the ability to generate a digital consent-based workflow and revert to a paper trail, adding more administration to the adviser process.
“Another consideration for advisers are the providers who have integrated digital signatures and alignment of adviser opt in and annual fee arrangements with the reform requirements.
“Such offerings provide advisers with control of the narrative and branding of communications with their clients, which can give both sides greater peace of mind.”
Comments
Yep, thinking about transferring all my platform clients to things like Nabtrade or Commsec and using MFunds and other investments. Platforms are part of the problem.
Whilst adviser numbers continue to shrink and the growth expectations on platforms remain, they will have no choice but to establish a direct relationship with consumers. Netwealth is angling towards this with their online portal thing.
thank you my son
Your behind on our private Child Support Agreement too “honey”
Platforms should be obliged to forward any information given to a client's advisor to that client.
AMP starts Intra Fund Advice service - that seem to be what "community expectation" requires (and CHOICE and ASIC).
We advised clients to invest into these platforms, we rolled them over from elwhere so without us they would not be in that platform. These are not the funds clients, they are ours. They have super with them, but the advice relationship that sits over the top encompasses a lot more than just super. Ill remind the funds of this, our personal relationships with our clients overrides your single product relationship, muck with that at your own peril.
This is just another step in excluding the adviser from the equation
Clients think that if they have this direct relationship with the company and platform why should they pay the adviser
They are under the belief they will get the same advice and direction from the company platform traders as they will get from their adviser and not have to pay for it.
This whole LIF issue FASEA exams outrageous exam requirements for products most will never use is all part of a larger picture to destroy the retail adviser industry and keep more of the profits in house
The platforms doing this are digging their own grave with this sort of clandestine behaviour. It simply makes life more difficult for the adviser (IF that's even possible at this point!) The platforms have ZERO business if the advisers are not providing it to them and NO adviser is going to forgive a platform that makes him/her look bad in the eyes of a client. As if the advisers don't have it hard enough currently ONLY TO bite the hand that feeds them - the advisers! Just on the basis of loyalty intelligence alone, why on earth would an adviser continue to provide business to such a platform as it stabs the adviser in the back?!
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